Corporate Responsibility Survives and What to Do about CSR in China

April 25, 2009

Corporate Responsibility Survives and What to Do about CSR in China

Good news. Corporate responsibility makes it through the recession. Hurrah. An article in the Financial Timesby Michael Skapinker supports his argument by citing that despite the recession where people are cutting down on premium foods, only about 10% have cut back on ethical produce. And Marks and Spencer (M&S) who made a big bet on sustainability with its Plan A (there is no Plan B!), is saving money on its CSR practices. So that’s all good news for those of us who believe that corporate responsibility is an integral component of reputation and one that has not let us down (nor have we let it down).The last paragraph of Skapinker’s article says it well:

“This [saving money] is the key to companies’ stubborn adherence to corporate social responsibility. They have worked out how to make it pay. Many of their initiatives help to cut costs or sustain supplies. They allow customers to continue to regard themselves as ethical during difficult times. They also help the companies to improve their public reputations at a time when business is widely held to be responsible for the downturn.”

Not surprisingly when I first read this paragraph, I read public reputations as public relations. In a way, this confirms why I am in the public relations field – to improve public reputations. Since there is no such thing anymore as an UNpublic reputation (everything internal is external today), I can really say that I am in the field of public reputations. I like this twist.

On another but somewhat importantly-related subject, I was reading about last year’s Sichuan Earthquake in a newsletter published by knowledge@wharton (you should subscribe if you don’t already). I was in China weeks after the earthquake and wrote about it on my blog at the time. In fact, a lot of the media coverage I received was in response to whether I thought companies were doing enough. The recent article does an excellent job of explaining what I experienced about the fiercely negative images of some multinationals (MNCs) in terms of corporate giving perceptions. I saw that some MNCs were on these shame lists that were being circulated online and inciting boycotts and negative opinion. The general consensus in China was that MNCs were not contributing enough and not in a timely manner to the 70,000 earthquake victims who lost their lives and five million left homeless. At the time, I did not know that there was a term for these maligned MNCs but the article references them as “international iron roosters” – that is, birds that do not give up one single feather. In other words, tightfisted. Being sensitive to negative public sentiment, many of these MNCs increased their charitable donations and met with the Chinese Ministry of Commerce to understand what was expected of them in China. I should note, and so does the Wharton authors, that even Chinese companies were criticized for insufficient donations to earthquake victims.

The article points out three must-dos when it comes to China and maintaining your reputation in challenging times. These should be on every company’s What to Do list if something like this happens again and you want to keep your reputation intact. They are:

1.Get Straight to the Top or Distribute Decision-Making. Since many MNCs have multi-layered levels of management and multi-faceted reporting lines, companies need to have a clear, direct lines to the top when decisions are urgent and reputations are at stake. Companies should prepare processes for determining when a decision is urgent. Much of the problems that beset MNCs were the bureaucracy that needed to be hacked through to get a decision made about how much could be contributed. If this is too hard, companies should give local managers the necessary decision-making authority.

2.Decide Fast and Make Visible. Some companies were criticized because their contributions came late or they did not make their donations known. When Hurricane Katrina hit New Orleans, some U.S. companies kept their donations quiet because they did not want it to look like they were only donating to improve their public images. In addition, many companies in the U.S. are torn between being humble or vocal when it comes to corporate responsibility. But in China during an incident of such horrific magnitude, those companies that kept quiet were seen as non-contributors and blamed for being insensitive and profit-mongers. So speak up.

3.Find your Advocates and Use Your Online Resources to the Max. Since such a large proportion of Chinese citizens are online, make sure you know what is being said about your company and its contributions. Your reputation matters and myths and rumors spread like wildfire. For all you know, you are on some boycott list and people are picketing your stores and products. Find your fans or advocates and make sure they are there to support your efforts or correct misunderstandings, online and offline.

Thanks to Skapinker and to knowledge@wharton for making this a good learning day when I should be outside.

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Leslie Gaines-Ross

lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.